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Macmahon Holdings has been chosen as the preferred mining contractor for the establishment and operation of the new Byerwen Coal Mine near Glenden in Bowen Basin, Queensland.

The establishment and operation of the mine is subject to the grant of mining leases.

Project proponent of Byerwen Coal Mine, QCoal, has notified Macmahon about its intention to enter exclusive negotiations and finalise the terms before reaching a mining services contract.

This proposed contract will be based initially on a cost reimbursable model and shift to a hybrid of schedule of rates and cost reimbursable model within the first year.

Macmahon will now begin mobilisation and other preparatory activities.

"This is a quality project, which will deliver significant benefits to the local and state economy."

Its scope of work in the proposed contract is expected to cover the whole range of open-cut mining and bulk earthworks related services for at least three years.

At this stage, the potential total material movement over three years is indicatively 50 million bank cubic metres every year. The potential value of the mining contract over its life is yet to be determined.

Macmahon CEO Michael Finnegan said: "This is a quality project, which will deliver significant benefits to the local and state economy.

"While there is still a lot of detail to be negotiated, we are buoyed by our selection as preferred contractor, which highlights our ability to compete for desirable new projects.

"If we are successful in securing this opportunity, the project will mark our re-entry into the Queensland coal market following the successful conclusion of our Cameby Downs contract in 2013 and our Eaglefield contract in 2014 where we operated for ten-plus years."